By AMY M. CARLES
Do you have the recommended $1,000 minimum set aside for emergencies? If so, could you use another $1,000?
An additional $1,000 in savings can be very beneficial, especially since experts recommend having at least three to six months of savings for expenses set aside in a reliable, liquid account.
But, finding an extra $1,000 often seems daunting. But America Saves offers an easy four-step plan to save $1,000 in just 10 months.
First, find a safe place to save, which should be an account you can easily access in an emergency. This means a U.S. Savings Bond or mutual fund would not be the best place.
A traditional savings account or short-term certificate of deposit might be best. Early withdrawal penalties rarely lower the yield below that of a savings account.
You may wish to open a new account or a sub-account for your fund so you are not tempted to spend it. Do not keep the savings in a checking account, which pays no or low interest and is too easy to access.
Second, save $100 a month.
Maybe you are already saving $100 a month. If so, kudos. You can save $100 more a month to double your savings.
It can often be a struggle to find $100 to set aside.
You can either earn $100 more, or cut back $100, or you can earn part of the $100 and cut back the rest.
You may be thinking this is easier said than done, but trimming expenses can be easier than you think.
America Saves offers 54 ways to get you started, which you can find, along with many other tips, at www.hancocksaves.org.
Hancock Saves also offers monthly classes, which are also posted on the website.
It helps to pay yourself first and save the $100 at the beginning of the month instead of waiting to see if you have money leftover to save.
The third step is to automate your savings. Once you set it up, it happens without you having to think about it, and you are less apt to miss the money.
Have your employer deduct the money directly from your paycheck and transfer it to your savings every pay period. Ask your human resources representative for details on how to do this.
You can also ask your financial institution to transfer the $100 from your checking account to your savings account every month. Talk to your bank or credit union to set this up.
The last step is just to wait 10 months and watch your savings grow.
Have you ever looked at your calendar and thought that half the year has already flown by? You will be shocked at how fast time adds to your savings account when you let it accumulate on its own through automatic savings.
The hardest part will be to not touch the money unless you have an emergency. After all, that is the reason you are saving.
Once you have the $1,000 seed money in your emergency account, continue to build your emergency fund or apply that money to a new savings goal. Maybe you have debt you would like to reduce, or a big ticket item you would like to save for.
No matter what your savings goals may be, Hancock Saves can support you with tips and advice through America Saves and many other sources.
America Saves is a national campaign managed by the non-profit Consumer Federation of America that seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth.
Hancock Saves is the area campaign. More information is available at www.hancocksaves.org, or by calling 419-422-3851.
Carles, with Ohio State University Extension, is program coordinator for Hancock Saves.
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